Aug. 16, 2014
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Spring training at Goodyear ballpark. / Arizona Republic

by Peter Corbett, Arizona Republic

by Peter Corbett, Arizona Republic

Glendale and Goodyear may not receive any of the $100 million-plus in repayments the cities were promised for Cactus League baseball complexes, because tax revenue used to pay them continues to fall below original projections.

Under the best scenario, the financially squeezed Arizona Sports and Tourism Authority will repay the two West Valley cities sometime between 2021 and 2031, well beyond the original schedule.

Glendale is owed $60 million of the $141.7 million the city spent building Camelback Ranch stadium for the Chicago White Sox and Los Angeles Dodgers.

Goodyear is waiting for $57.5 million from the authority for its $123 million investment in Goodyear Ballpark, the spring-training home of the Cincinnati Reds and Cleveland Indians.

But the money may never come for the cities before the sports authority and its tourist taxes are phased out in 2031, forcing the host cities to pay the full stadium tab.

"There's no guarantee that these funds will be available," Tom Sadler, sports authority president, recently told the Glendale City Council. He added that the authority anticipates there will be money to pay the cities, but the organization is already far behind in revenue.

The cloudy forecast the authority presented to Glendale has been years in the making. And the potential Cactus League shortfall could worsen Glendale's efforts to dig out of a financial hole linked to its $180 million investment in Jobing.com Arena and other major costs to keep the Arizona Coyotes in Glendale.

The sports authority's revenue from a 1 percent hotel tax and 3.25 percent rental-car surcharge to pay for Cactus League facilities has fallen far short of initial projections, and the Great Recession compounded the problem.

Add to that an arms race of costly, state-of-the-art ballparks, clubhouses and training facilities for Arizona's 15 Cactus League teams, all playing in Maricopa County.

The other host cities are awaiting sports-authority payments of $1 million to $20 million each over the next decade. The authority has no legal obligation to repay the cities.

Voters approved Proposition 302 in 2000 to pay for University of Phoenix Stadium, tourism promotion, Cactus League improvements and youth sports.

It was projected to generate $403 million for the Cactus League.

Kevin Daniels, the authority's chief financial officer, said the Cactus League funding is likely to fall $163 million short of that based on more conservative projections.

Money for the Cactus League is third in line behind the University of Phoenix Stadium debt and tourism promotion.

Plus, Glendale and Goodyear are the last priority to be repaid among the league's host cities.

A state court ruling in June that struck down the rental-car surcharge as unconstitutional could worsen the problem. The authority stands to lose close to $12 million annually.

Authority attorney Sarah Strunk said an appeal of that decision is months away.

If the decision is not overturned, the authority will pay the debt service on University of Phoenix Stadium, and the "rest of the waterfall of funds" will suffer, Sadler said of funds for tourism, the Cactus League and youth sports.

Glendale invested $141.7 million in Camelback Ranch and the teams spent a combined $10.9 million.

In 2009, the city expected the sports authority to repay it $60 million plus interest with payments starting in 2017.

With the funding delay, Glendale is owed $60 million, plus it could be owed as much as $63 million in interest payments over 32 years depending on sports authority revenues.

And the repayment delay has moved the timetable back to at least 2021 and as late as 2031. The authority and its tax collections will end in 2031, and the funding could run out before Glendale gets a nickel.

Tom Duensing, Glendale finance director, said the city has five-year budget projections, so it has not yet figured in possibly losing the revenue to pay for its stadium debt.

Glendale paid $11 million in debt payments this past fiscal year for Camelback Ranch, and the city's total debt for the project is $373 million through 2038. The initial leases for the teams run through 2028.

Glendale received about $62,000 as its share of sales-tax revenue from the stadium this past fiscal year and was reimbursed about $46,000 for Glendale Fire Department staffing of spring-training games.

Sales-tax revenue from the stadium, which is in Phoenix at 107th Avenue and Camelback Road, is split. Glendale gets 80 percent, and Phoenix gets 20 percent.

Plus, Glendale owes Phoenix $3.7 million for more than 14 acres it bought for Camelback Ranch. That money is due in October, but Glendale is trying to negotiate to change the terms.

Goodyear is in a similar position as Glendale as city officials await repayment of their stadium investment. The city spent $113 million for Goodyear Ballpark and a two-team practice facility.

The authority is projected to pay the city $57.5 million within the next seven to 17 years. But Goodyear is last on the repayment schedule.

"(Goodyear) has made provisions to ensure we could satisfy our debt obligations that will not adversely affect our budget," City Manager Brian Dalke said.

Goodyear's annual debt payment for the ballpark is about $5.3 million.

Goodyear Ballpark generated about $4.7 million this past spring from ticket sales, concessions, parking and souvenirs. The city's share of that revenue is about $1 million, said Larry Lange, Goodyear finance director.

Mark Coronado, Cactus League Association president, said, "It's clear that the current funding mechanism is not sufficient to take care of the obligated debt."

Some of the cities continue to be repaid for their Cactus League investments. The authority projects it will pay off Surprise's $32 million in bonds by July 2016.

A 2012 study, commissioned by the Cactus League Association, estimated that spring baseball generated $230 million in visitor spending annually for the region. Another study showed that Cactus League facilities generated an additional $210 million annually from year-round baseball training by minor-league players.